LABOR SHAREHOLDING. - It is one of the correctives to the wage system, by which workers and employees obtain ordinary or special shares of the same enterprise in which they perform their work.
The idea of labor shareholding arose from the need to eliminate the drawbacks of a simple wage agreement, among which are that of not proportioning the worker's remuneration to the conditions of the firm, and above all that of not establishing a bond of felt solidarity between the two factors of production: capital and labor. An attempt was made to remedy this deficiency through profit-sharing, but this system has not always produced the results that were hoped for; moreover, it does not make the worker a true partner in the enterprise, and therefore makes it difficult for him to take an interest in the prosperity and fortunes of the productive organism of which he is a part. For there to be a solid union among the actors in the economic process, they must all have ownership of the instruments of production. Profit-sharing alone does not constitute a partnership, because it does not create a legal person distinct from that of the contracting parties. It was then thought to integrate and perfect participationism by means of labor shareholding. This institution, without overturning the wage system, satisfies the principal requirements of the corporate regime and gathers its advantages. Through labor shareholding, in fact, the worker receives the portion of profits due to him in shares, with which he acquires the same rights proper to capital shares: that is, participation in the dividend, deliberative intervention in the general meetings of the company, and representation on the board of directors.
Labor shareholding may be individual or collective; in the first case, the holder of the shares is the individual worker; in the second case, the holder is some body representing an aggregate of workers. If this aggregate is a trade union, the labor shareholding is called union shareholding. Labor shares may come not only from profits, but also from particular savings made by the worker, or from a simple gratuitous concession on the part of the employer.
Not long ago, labor shareholding was promoted by the Christian Social movement as one of the most effective means for the harmonious composition of the classes and the attainment of industrial peace. It is well known how much Msgr. Pottier, the distinguished Belgian sociologist, advocated it through his writings and his social action. Today, a quarter of a century later, Pottier's optimistic predictions about labor shareholding have not been entirely fulfilled. This is not to devalue the system as though it were utopian: the trust placed in it may have been excessive, but it was certainly not unfounded. "It would therefore be deplorable," observes wisely Nell-Breuning, "that the conception of labor shareholding should be entirely abandoned, for the reason that not all the hopes placed in it have been fulfilled. Expectations must be narrowed within the limits of the possible, and then the paths to success resolutely sought" (Die soziale Enzyklika, Cologne 1932, p. 113).
Evidently, labor shareholding is not a panacea, but if in the enterprises in which it can be applied, that is, in enterprises of a capitalistic character, it is adopted with fairness and wisdom, it cannot fail to benefit the elevation of the worker and the improvement of relations between capital and labor. It is certain that thus far here and there it has had some good success, such as the decrease in strikes, the increase in output, and the stability of the workforce.
Of the two forms of labor shareholding, the individual one is that which best responds to the worker's psychological needs, inasmuch as it is a stimulus to his personal interest and a concrete sign of the increased consideration he enjoys in the enterprise. There is no doubt that this institution squares perfectly with the social directives of the Church. It suffices to recall what Pius XI suggests in Quadragesimo anno, when he treats of the wage system. "In the present conditions of society," he says, "we deem it more prudent that, as far as possible, the labor contract be tempered somewhat by the contract of partnership, as has already begun to be done in various ways, with no little advantage to the workers themselves and to the employers. Thus the workers become sharers both in ownership and in administration, and participants, to a certain extent, in the profits received" (no. 30).
Bibliography6 works
Angelo Bruceleri